India-Russia Trade Relations: Amid the ongoing war between Russia and Ukraine, India is increasing its trade cooperation with the East, especially crude oil. According to the commerce ministry, Moscow has moved up to the fourth position in the list of top 10 merchandise import source nations in April-December 2022. current financial year.
“India-Russia bilateral trade witnessed significant growth with both sides resolving issues relating to trade barriers, payment mechanisms, logistics and others,” the commerce ministry said.
“Both sides are trying to enhance trade ties keeping in mind each other’s needs and capabilities,” the ministry said.
India imports 85% of its crude oil requirement.
Significantly, India is the third largest oil consuming and importing country in the world. It imports 85 per cent of its crude oil requirement. Crude oil is converted into fuels such as petrol and diesel in refineries. However, since war broke out between Russia and its neighboring country last year, the West and Europe have imposed tighter sanctions on its energy. This resulted in Russia offering more concessions to its oldest ally India.
Where was India’s trade with Moscow before the Russo-Ukraine war?
Before the Russia-Ukraine conflict, more than 60 percent of the Indian crude basket was made up of Middle Eastern crude, with North American crude remaining at about 14 percent, West African crude at about 12 percent, and Latin American crude at about 5 percent, Russian Grades account for only 2 percent.
New Delhi’s crude imports from Moscow rose further in December 2022, topping 1 million barrels per day (bpd) for the first time, according to data from energy cargo tracker Vortexa. The data claimed that Moscow remained its top oil supporter for the third month in a row.
Russia, which accounted for just 0.2 per cent of all crude oil imported by India till March 31, 2022, supplied 1.19 million bpd in December.
Government of India’s tough stance on Russian imports
The Indian government has been strongly defending its trade with Russia, saying it must get oil from where it is cheapest. The government had earlier indicated that oil companies would continue to buy oil from Russia outside the price cap.
External Affairs Minister S Jaishankar told the Rajya Sabha on December 7 that Indian refiners would continue to look for the best deals in the interest of the country. “We do not ask our companies to buy Russian oil. We ask our companies to buy oil (based on) what is the best option they have. Now, it depends on what the market bounces back,” he had said while replying to clarifications sought by MPs on his own moto statement on foreign policy.
(with inputs from agencies)